Explainer: What is the Fourth Industrial Revolution?

The pace of technological and scientific breakthroughs is unprecedented – and shaping our world

Signs of the revolution? Processing at the Mai Dubai water factory is now largely automated. Antonie Robertson / The National

The 21st century is like no other time in terms of the pace of breakthroughs in science and technology.

Artificial intelligence, quantum computing, biotechnology, unprecedented processing power and the connectivity of billions of people on the planet through the internet are merely the beginning of a long list of exciting areas already transforming our world.

To grasp the potential of this era and the changes to work and life already under way, it is critical to understand the Fourth Industrial Revolution.

A quick history lesson

The idea of a Fourth Industrial Revolution relies on the idea that humanity has been building upon technological progress since the First Industrial Revolution when, in 18th century England, water and steam power was used to mechanise production. This marked humanity's shift from a reliance on agriculture and handmade goods to the advent of industrial manufacturing.

The Second built upon that electric power to create mass production. The Third used electronics and information technology to automate production, beginning in the 1960s. The World Wide Web gave way to mass connectivity and communication, alongside a glut of innovative products and services.

And that’s when the next Revolution unfolded.

The Fourth Industrial Revolution explained

In 2016, Klaus Schwab, founder and executive chairman of the World Economic Forum coined the term 'Fourth Industrial Revolution'.

He defined it as a technological revolution that merges physical, digital and biological technology to deliver unprecedented products and services in new sectors.

This technology includes artificial intelligence and automation, 3D or additive printing, human-machine interfaces, quantum computing and advanced materials.

This particular revolution has given rise to the concept of ‘smart’ cities, factories, homes and workplaces. Such places use AI as they work and develop, continuously adapting and optimising accordingly to be more efficient and responsive.

Where to find 4IR

4IR technology is not yet global. Uneven distribution of automation and digitalisation, for instance, has increased inequality.

The United Nations found that four countries – the US, China, Japan and Germany – account for more than three quarters of the patents related to 4IR technology. Nations falling behind could suffer as more efficient, cheaper and faster ways of doing business lead to a less competitive world in this more globalised economy.

As automation supplants human workers, the net displacement of labour by machines might exacerbate the gap between returns to capital and returns to labour. On the other hand, it is possible that the displacement of workers by technology will, in aggregate, result in a net increase in safe and rewarding jobs, the World Economic Forum says.

The proliferation of 4IR technology, the UN says, is a “virtuous cycle” – one in which the more technology that drives an economy, the faster digital products diffuse through industry, creating a greater build-up of experience and expertise, “which in turn accelerates the process of further digitalisation”.

Why this matters

Like those before it, the Fourth Industrial Revolution has the potential to increase income levels and improve the quality of life for people around the world. It is also likely to create "a supply-side miracle", Mr Schwab wrote in his original description of what the world might be under this revolution.

He argued that long-term gains in efficiency and productivity would result in falling costs for transportation and communication while logistics and global supply chains will become more effective. Trade costs will also fall. Taken together, this has the opportunity to open new markets and drive economic growth.

Still, what was true when 4IR rose to prominence in 2016 remains true in 2021: "To date, those who have gained the most [from the Fourth Industrial Revolution] have been consumers able to afford and access the digital world; technology has made possible new products and services that increase the efficiency and pleasure of our personal lives. Ordering a cab, booking a flight, buying a product, making a payment, listening to music, watching a film, or playing a game – any of these can now be done remotely."

In addition to access and scaling 4IR technology, another challenge persists: the question of privacy.

Collecting, aggregating and leveraging data is the lifeblood of much of the technology that underlies this revolution.

Going even further, as AI develops we will debate "what it means to be human", Mr Schwab says. Changing the "current thresholds of lifespan, health, cognition and capabilities, will compel us to redefine our moral and ethical boundaries."